S.C. Senate Majority Leader Harvey Peeler today expressed his full support for the passage of a federal balanced budget amendment, and gave his encouragement to the sponsors of a bill that would send an amendment for approval to the states. U.S. Sens. Orrin Hatch and Mike Lee are leading an effort by congressional Republicans to implement a permanent law requiring the federal government to pass a balanced budget. In a letter to the senators, Peeler said he would work tirelessly for ratification of the amendment if it was sent to the states.

“It is vital that Congress pass a balanced budget amendment. Quite simply a balanced budget amendment is the only mechanism that will ensure that Congress gets federal spending under control,” Peeler wrote. “Without it, America will spend itself into insolvency and will mortgage our children’s future. To prevent the grave harm that will come to our nation from a debt crisis and to ensure that Congress spends no more than it takes in, Congress and the state legislatures must act to amend the United States Constitution to require a balanced federal budget.”

If passed, the amendment would require Congress balance every budget, cap spending at 18 percent of Gross Domestic Product and require a two-thirds majority vote to raise taxes or raise the debt ceiling. The bill has the support of every Republican in the U.S. Senate, and benefited from the hard work of South Carolina’s U.S. Sen. Jim DeMint.

The amendment passing both houses of Congress by a two-thirds vote is only the first part of the process. At least 38 state legislatures have to ratify the amendment, which means that support at the state level is key to its adoption.

(Columbia, SC) - Today, the SC House of Representatives voted to sustain 8 of the Governor’s 34 line-item budget vetoes.

House Speaker Bobby Harrell said, “This is a conservative spending plan that fell well below proposed growth caps - the Governor stated at yesterday’s press conference, there was ‘no pork included in this year’s budget.’ This budget contains no pork spending while still addressing the needs of our citizens. Lawmakers focused on funding core functions of government while also addressing key issues like debt repayment, increases to reserve accounts and increases to education funding.”

Of the Governor’s 34 vetoes, the overwhelming majority of total dollars vetoed were contained in 4 individual vetoes with significantly less funding tied to all other line-item vetoes:
· Veto of bill 3701 - Capital Reserve Fund - $107,683,455 *

· Veto 32 - EFA Base Student Cost - $56,174,107

· Veto 35 - Education Foundation Supplement - $20,000,000

· Veto 5 - School Bus Funding - $12,400,000

The fact is, this budget does not exceed the Governor’s proposed growth cap. This is because of the unprecedented amount of money that was not spent and instead set aside for items like debt repayment and increases to rainy day reserve accounts:
· $146 million to unemployment debt repayment

· Up to $261 million to fund increases to the General Reserve Fund 5-years early

· $104.8 million dedicated to an additional back-up reserve account

· $198.6 million to fully fund general obligation bond payments.

Vetoes overridden by the House will now go to the Senate for their consideration.

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* The Capital Reserve Fund is a rainy day fund in addition to the state’s General Reserve fund. After the state closes its books for the year, and there is no pending budget deficit, only then can items prescribed in this bill be appropriated. This year’s Capital Reserve Fund included such funding items as:
· $5 million Closing Fund for the Department of Commerce

(Columbia, SC) – Today, the SC House of Representatives will address the 34 line-item vetoes the Governor issued on the conservative budget approved by the General Assembly last week. The $6 billion FY2011-2012 state spending plan focuses on vital core functions of government and addresses top areas of concern like debt repayment and increased education funding.

In yesterday’s budget veto press conference the Governor stated the fact that there is “no pork included in this year’s budget.” We appreciate her acknowledgement of this fact.

Given this total lack of pork spending, the Governor’s justification for these 34 vetoes is an assertion that the budget exceeds a reasonable growth rate (CPI plus population growth) of 4.83% by $75.6 million.

The fact is, this budget does not exceed this cap and actually is tens of millions of dollars below the 4.83% growth cap. This is because of the unprecedented amount of money that was not spent and instead set aside for items like debt repayment and rainy day reserve accounts:
· $146 million to unemployment debt repayment

· Up to $261 million which fully funds increases to the General Reserve Fund five years ahead of schedule

· $104.8 million dedicated to an additional back-up reserve account

· $198.6 million to fully fund general obligation bond payments.

The only way to assert that spending in this year’s budget went above this cap is to treat hundreds of millions of dollars in non-growth items - like debt repayment and funds set aside for reserve accounts - as “new spending.” This irregular accounting practice distorts the actual “spending” included in this budget and disregards the fact that, when accounted for correctly, this budget falls well below the 4.83% growth cap.

House Speaker Bobby Harrell said, “Now boasting the lowest state taxes in the nation, this year’s budget represents another conservative spending plan that South Carolinians have reason to be proud of and have grown to expect from lawmakers. This budget sets aside an unprecedented amount of money that was not spent and falls well below proposed growth caps. Our decisions to cut government spending instead of raising taxes, focus on debt repayment and responsibly plan for our state’s future have made our state’s economy more competitive and will allow for the private sector job growth our citizens need.”

(Columbia, SC) – Today, the House approved a $6 billion final budget compromise (H. 3700) reached by the joint House/Senate Conference Committee. The FY2011-2012 state spending plan focuses on vital core functions of government and addresses top areas of concern like debt repayment and increased education funding.

House Speaker Bobby Harrell said, “This year’s more transparent budget process has produced fiscally conservative spending decisions that address our citizens’ needs and responsibly plans for our state’s future. A focus was placed on targeting core government functions. Plans to repay debt, increase reserve accounts and add to the base student cost were all funded.”

Highlights of fiscal discipline in this budget include an unprecedented amount of money that was not spent and instead set aside for items like debt repayment and rainy day reserve accounts. This includes $146 million to unemployment debt repayment, up to $261 million which fully funds increases to the General Reserve Fund five years ahead of schedule, $104.8 million dedicated to an additional back-up reserve account, and $198.6 million to fully fund general obligation bond payments, $196.4 million to be returned to communities to aid local government.

Instead of spending this year’s recently announced revenue surplus on legislative wish lists, lawmakers directed money to debt repayment, education and funded increases to the General Reserve Fund five years ahead of schedule. It’s also important to note that this revenue surplus was the result of increased private sector economic activity and not from any kind of tax increase.

“By keeping taxes low, getting government bureaucracy out of the way and cutting government spending to balance our budget, we have created a competitive and fair business climate that is allowing our state’s economy to grow out of this national recession,” Speaker Harrell said.

“In this finalized budget, the General Assembly clearly showed that economic development, education, responsible debt repayment and increased reserve accounts are top fiscal priorities. Lawmakers are focused on keeping taxes low, creating a strong business climate and a quality education system to create the jobs our state needs to recover economically – and our efforts are producing real results.”

(Columbia, SC) – Today, the joint House/Senate Budget Conference Committee delivered signed Conference Reports to both legislative bodies. Under the current House rules, this proposed compromise on next year’s spending plan is available for immediate action. However, House Members have agreed to abide by a rule proposed – but not yet adopted – by Rep. Dan Hamilton (District 20 – Greenville) that allows for a more transparent budgeting process.

A key provision of this proposed transparency rule is a 24-hour hold on any action or debate upon the House receiving a signed Budget Conference Report. During this time, the complete Conference Report will be made available to the public online. Therefore, the House will wait until Wednesday before acting on the spending compromise. A majority vote by both bodies is necessary to send the finalized budget to the Governor’s desk.

“This year’s budget debate has produced one of the most open and transparent budgets in our state’s history.

“Making on-the-record votes for each section of the budget state law and allowing more time to study changes made to this year’s plan has helped us craft a more fiscally conservative and responsible budget during these difficult economic times. These newly added transparency measures have increased accountability and given lawmakers – and the public – the time and tools necessary to scrutinize each spending decision so that every taxpayer dollar is spent wisely.

“I commend the entire body – House Republicans, House Democrats and the members of the Black Caucus – for all voluntarily agreeing to this more transparent budget process. Next year, I expect the House to take up Rep. Hamilton’s rule change and make all future budgets much more accountable to the people.”